United Community to buy HCSB Financial in South Carolina

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United Community Banks in Blairsville, Ga., has agreed to buy HCSB Financial in Loris, S.C.

The $10.7 billion-asset United said in a press release Thursday that it will pay $66 million in stock for the $376 million-asset parent of Horry County State Bank. The deal is expected to close in the third quarter.

HCSB has taken steps in the past year to improve its financial position. In March 2016 it hired Jan Hollar, a former executive at Yadkin Financial, as its CEO. A month later it completed a $45 million recapitalization led by Castle Creek Capital Partners, and in October it had a regulatory order lifted.

United said in its release that it will recover HCSB’s deferred-tax assets and other related tax benefits totaling about $11 million. The deal is expected to be neutral to United’s tangible book value per share, including transaction costs.

“This transaction fits squarely in our two-step coastal South Carolina growth strategy,” Jimmy Tallent, United’s chairman and CEO, said in the release. “Acquiring Horry County State Bank enhances our presence in the Myrtle Beach community and creates value for shareholders and customers of both organizations.”

HCSB has eight branches, $215 million in loans and $313 million in deposits.

Morgan Stanley and Troutman Sanders advised United. Hovde Group and Nelson Mullins Riley & Scarborough advised HCSB.

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